This proposal, in its second revision, focuses on improving effective S/N ratios for hearing aids and cochlear implants by means of a technique that increases gain when a signal causes the total in-band energy to become greater. By means of the appropriate design of signal- conditioning circuit elements, together with the inclusion of a directional microphone in the system, it is possible to improve the directional selectivity of the receiver. The consequent effective increase in the signal/noise ratio should of course improve intelligibility of the speech stream. As part of another research project, this system is being incorporated into a device designed as a tactile aid for hearing-impaired persons.